Anyone who’s looked at the market in the last couple of weeks will know that there were some events that shook investors. The revelation of DeepSeek AI’s capabilities resulted in record amounts wiped out from the valuations of many chip makers. Analysts have since then questioned the claims made by the Chinese, but most of the stocks haven’t been able to recover.
While geo-political issues looked to be dying down, Donald Trump initiated a tariff war by slapping tariffs on China, Mexico, and Canada. As a result, many stocks continue to tumble.
Despite all the above, the stock market boasted the best first 9 days of trading in a new presidential term since Barack Obama’s term started in 2013. This is incredible and continues to show the strength of the US economy.
We decided to come up with a list of stocks that helped the market post these amazing returns. To come up with our list of 5 stocks that started the year on a high, we only considered stocks with a market cap of at least $3 billion that outperformed the market in the month of January.
5. Hims & Hers Health Inc. (NYSE:HIMS)
Hims & Hers Health Inc. is a telehealth company that links consumers to licensed medical practitioners. It offers a range of curated non-prescription and prescription health and wellness services and products to purchase through its mobile app and websites. The company’s stock surged 48% in January due to its compounded obesity drug’s impressive sales.
By selling its weight loss drug at a discounted price, HIMS outpaced both of its competitor companies Eli Lilly (LLY) and Novo Nordisk (NVO). Even though the stock was among the best performers in January, the future outlook remains clouded. The company’s share performance might experience a downturn if semaglutide is removed from FDA’s shortage list in the coming months.
Daniel Grosslight, an analyst at Citi, further highlighted the risks associated with stock by stating that the company’s weight loss business would be significantly constrained due to limited compounding options. At the same time, he is cautiously optimistic about raising the target price from $24 to $25. Investors must consider the risks associated with this stock before making any decision, as the stock is volatile owing to its competitors.
4. H&E Equipment Services Inc. (NASDAQ:HEES)
H&E Equipment Services Inc. is an equipment services company that offers a range of equipment for rent to different industries. It operates through five segments including sales of rental equipment, parts sales, equipment rentals, repair & maintenance services, and sales of new equipment. The stock was up 56% in January. The surge in price came as a result of the news of the acquisition of HEES by United Rentals (URI) at $92 per share.
Right after the news broke, HEES’s stock price jumped from $43 to $90. Investors should note that there is a risk that regulatory authorities might not approve this acquisition even though Raymond James analysts think the risk is quite low. As stated by the analyst:
We see low regulatory risk, especially the somewhat nebulous definition of ‘equipment rental’.
In addition to regulatory risk, there is a chance of a higher bid for HEES, but it is unlikely to happen as the stock price is already high (more than double). As a part of the deal, HEES has the 35-day go-shop opportunity to find another potential acquirer offering a higher share price.
3. Tempus AI Inc. (NASDAQ:TEM)
Tempus AI Inc. is a healthcare technology company that provides molecular genotyping, polymerase chain reaction profiling, next-generation sequencing diagnostics, and other anatomic & molecular pathology testing. The company provides its services to pharmaceutical companies, healthcare providers, researchers, biotechnology companies, and third parties. As an innovative company with a focus on AI, it receives a lot of investor attention.
Cathe Wood raised her stake in the company in January by adding a further 600,000 shares to her company’s multiple funds. Even though TEM was only initiated in the ARK Genomic Revolution ETF (ARKG) in December, the weightage in the Ark Innovation ETF (ARKK) grew quickly to become the tenth-largest holding in the ETF. As things stand, TEM is 3.2% of ARKK’s total value.
Donald Trump’s inauguration and the subsequent focus on Project Stargate also propelled the stock forward. The company gained a healthy 69% on the back of the above two developments and is likely to continue delivering good performance for investors.
2. Oklo Inc. (NYSE:OKLO)
Oklo Inc. is a nuclear energy company that develops and creates fission power plants to supply commercial-scale and stable energy to customers. The company also offers recycling services for used nuclear fuel. During January, the company signed 2 important partnerships which caused its stock price to jump 96%.
On January 17th, OKLO signed an MoU with RPower to deploy its energy solutions over the course of the next 24 months to power the company’s data centers. Less than two weeks later, it signed another memorandum of understanding with Lightbridge.
OKLO’s energy solutions continue to be in demand because it can install them quicker and cheaper than existing nuclear power alternatives. Since these power solutions do not require to be refueled as frequently as other nuclear power plants, they are also environmentally friendly.
The share price jumped over 96% in January. This wasn’t a one-off though. The stock has been performing well for quite a few months and is up over 383% in just 4 months!
1. Akero Therapeutics Inc. (NASDAQ:AKRO)
Akero Therapeutics Inc. is a clinical-stage biotechnology company that develops transformative treatments for serious metabolic diseases. The company’s key product is efruxifermin (EFX) which is going through phase 3 of clinical trials. It was news related to this particular medication that caused the stock to surge 94% in January.
The company announced positive results of the Phase 2b study of EFX, a treatment for metabolic dysfunction-associated steatohepatitis, also referred to as MASH. The drug was well-received by participants with only minor adverse effects and no deaths reported.
Investors are likely to continue receiving the benefits of this development despite the massive price appreciation in January. This was further confirmed by Bank of America when it upgraded the stock from Neutral to Buy, raising the price target to $63 from the previous price target of $35. The stock last closed at $54.08 on Friday.
Akero Therapeutics is not on our latest list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held AKRO at the end of the third quarter which was 31 in the previous quarter. While we acknowledge the potential of AKRO as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as AKRO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
